NBC's Zucker Hints At Return to iTunes

Bad corporate blood led to the collapse of the NBC/Apple business relationship in the fall of last year. Now, via the Engadget news feed, comes word that things may be thawing out between the two. A for-pay article in the Financial Times had words from NBC Universal's COE Jeff Zucker, saying: "'We've said all along that we admire Apple, that we want to be in business with Apple.' He then unexpectedly adds, 'We're great fans of Steve Jobs.' No telling what has caused the turnabout. Perhaps the writers strike gave both parties time to reflect on their mounting lost revenue." The site also notes that NBC signed a deal as part of the recent movie rental announcement, possibly contributing to the thaw. They link to a BusinessWeek article pointing out positive statements from Jobs reciprocating these 'feelings'.

Comments

Obviously...

[dkf]

No telling what has caused the turnabout. Well, I bet it's called "money". If each reckons they can make more profit (or possibly just increase turnover) by tolerating the other, that's a strong incentive to grin and bear it. The details? They'll become clear over time.

Re:Obviously...

[Anonymous Coward]

Absolutely. Business is all about money. NBC believes (or believed) that they had the leverage to get more money out of Apple. Conversely, Apple believes (or believed) that NBC would be accepting of the status quo in terms of money.

And what happened? General Electric gave NBC an opportunity to create its own online video distribution service. How cool is that??? VERY cool, and it is a project I wish I worked on. Because a failure would mean that they just re-join the iTunes club, and a year or two of no iTunes sales. Sure, it had a small chance of success, but the cost was low and the potential payoff was huge. And it's a huge, unique project for those involved.

So I don't blame NBC for going in this route. I'm sure others will try too. But the fact is, a retailer that sells all products (instead of just one class of product) is compelling to consumers, and that's just something that NBC couldn't overcome given the current old-school business model in the industry of "we only sell our own stuff".

The record labels fell into the same trap. As Jobs knows, people certainly don't want to search 100 stores to find what they want - they want to shop at the Walmart of on-line media sales and be done with it.

Re:Obviously...

[morgan_greywolf]

Absolutely. Business is all about money. NBC believes (or believed) that they had the leverage to get more money out of Apple. No, I don't think they were trying to get more money out of Apple -- they were just trying to cut Apple completely out of the equation and keep all the profits for themselves. In the process, they learned that it's hard to build an online buying community and that Apple's success with iTunes, despite all appearances, did not happen overnight. Apple had to take plenty of losses for a while before they gained enough of an audience to make more money. Apple leveraged the money it made from its other successful businesses -- namely computer hardware and software sales so they had plenty of time to ride out the initial slow period.

Media companies are far less likely to do that. They expect each business unit to stand on its own and aren't as willing to leverage one business unit with another. That's why Big Media took so long to get into online distribution and why Apple had the opportunity to carve itself out a nice niche in the first place.

Translation...

[RyuuzakiTetsuya]

No one's going to the NBC site and thus sitting through ads to pay for our online venture.

I think that it's partially because of the way the content looks zoomed in. Compressed Flash Video never looks good, atleast whatever encoding Apple was using made an effort to look good when viewed up close.

Re:Translation...

[peragrin]

Not only aren't people using their site, their site is slow to load, the video is crappy at best, and their bandwidth bill must have been huge.

The great thing about apple's offerings is that you can output it to a TV at full screen and sit on your couch to watch them. Try that with most flash video's. Youtube it is allowed CNN it isn't.

Re:Anything is better than nothing.

[marcsiry]

I think it's telling that Sanctuary's About page describes the hardware and software used to create the show, but doesn't tell me what the show is, you know, about.
 
Art is about creating an emotional connection with the viewer. Maybe when the Sanctuary folks realize that's more important than "an innovative 3D computer-model tracking system live on set" they'll begin to accrue more viewers.

NBC was paying attention...

[OSXCPA]

...to the fact that .torrent activity for their shows went through the roof when they pulled out of iTunes, taking their shows and affiliates with them. I know people (cough) who used to happily pay $1.99 an episode for Law and Order, Project Runway and Battlestar Galactica who discovered that those shows were available 'free'. Considering the only other option was buy a Tivo and / or upgrade cable to get Bravo and SciFi - what do you think they did? They would certainly go back to paying the $1.99 if the option were available.

Re:Anything is better than nothing.

[stewbacca]

Yes, I am aware of this. I'm also aware that just because a site hosts something called "LOST -- s03e014" doesn't necessarily mean I'll get a high quality, English version of episode 14. Usually I get episode 12, in Norwegian with Russian subtitles (ok, hyperbole, but you get the point). I can usually find it with a little looking around, but on iTunes I could find it in 5 seconds; every episode of every season in the correct order with the correct episode title. This is the greatest strength of "legitimate" media outlets and is worth $1.99/episode (less if purchasing the whole season) every time.